Transcript RAC –The Recovery Audit Contractor: How did they get their

AR Systems, Inc
Training Library Presents
RAC ATTACK – A Guide to Successful Appeals
“To Appeal or not to Appeal
-A Strategic Decision”
Instructor:
Day Egusquiza, Pres
AR Systems, Inc
RAC 2011
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RAC –The Recovery Audit Contractor:
What’s a provider to do?
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Where are we today? – powerful updates
Walking thru the process - defense /validation
audits/moving forward
Impact to departments –from letters to recoupment
How will the recoupments work – automated vs complex
Prevent the denial but know the Provider Options
Tracking and trending
5 levels of appeal – decision points
Balancing moving forward as well as looking back
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Goal of the Audit Culture
 To
ensure billed services are reflected in
the documentation in the record
 To ensure billed services are in the
medically correct setting for the pt’s
condition
 To ensure billed service reflect the ‘rules’
regarding billing for the specific service
 To ensure documentation can support all
billed services according to the payer
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rules.
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CMS Claim’s Review Entities
Roles of Various Medicare Improper Payment Reviews
Timothy Hill, CFO , Dir of Office on Financial Mgt
9-9-08 presentation
Entity
Type of
claims
How selected Volume of
claims
Purpose of
review
QIO
Inpt hospital
All claims where
hospital submits an
adj claim for a higher
DRG.
Expedited coverage
review requested by
bene
Very small
To prevent improper
payment thru
upcoding.
To resolve disputes
between bene and
hospital
CERT
All
Randomly
Small
To measure improper
payments
MAC
All
Targeted
Depends on # of
claims with improper
payments
To prevent future
improper payments
RAC
All
Targeted
Depends on the # of
claims with improper
payments
To detect and correct
past improper
payments
PSCZPIC
All
Targeted
Depends on the # of
potential fraud claims
To identify potential
fraud
OIG
All
Targeted
Depends on the # of
potential fraud claims
To identify Fraud
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Summary: Review & Collection Process
1
Automated Review
New
Automated
Review
Issue
Posted to
RAC’s
website
2
RAC makes a
claim
determination
The Collection Process
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Carrier/
FI/MAC
issues
Remittance
Advice (RA)
to provider
From Cmdr Casey, RN, CMS
N432:
Complex Review
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New
Complex
Review
Issue
Posted to
RAC’s
Website
“Adjustment
based on a
Recovery
Audit”
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Provider
submits
medical
records
• Provider has 45 + 10
calendar days to
respond
• Providers may
request an extension
• Claim is denied if no
response
RAC clinician
reviews
medical
records;
Day 41
Carrier/FI/
MAC
recoups
by offset
• Recoupment
will NOT
occur if:
provider
has paid in
full; or
provider
filed an
appeal BY
day 30
makes a claim
determination
• RAC has 60
calendar days
from receipt of
medical record to
send the Review
Results Letter
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If no
findings
STOP
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Walking Thru – Results Lettercomplex reviews only
 Results
letter is sent regardless of an
actual denial/pending recoupment.
 Results letter could include a dollar amt –
estimate only.
 Demand letter follows “shortly thereafter”
with a $ amt.
 Remittance with N432 notifying of
pending recoupment also occurs during
the same period.
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Transmittal updates
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Transmittal 659/CR 6870. “Reporting of recoupment for
overpayment on the remittance advice/RA”
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Effective date 7-1-10
CMS acknowledges that the current HIPAA 835 RA does not properly at both the
claim and provider level to meet the requirements of Section 935 of MMA 2003.
MM6870 describes the manner in which CMS will now record RAC
overpayments.
Step 1: Records the reversal and correction to report the new payment and
negate the original payment at the claim. Actual recoupment of funds does not
occur at this step.
Step 2: Reports the actual recoupment at the provider level of the 835. There is
no entry at the claim level.
More detail will be added to the remittance: N432 –both pending and actual
recoupment; N469 –accts impacted by appeal filed within 30 days/recoupment
held/interest begins (Transmittal 141)
• Step 2: PLB reason code (FB ) forward balance. Demand letter is also sent at this time.
• Step 2: PLB reason code (WO) overpayment recovery.
http://cms.gov/transmittals/downloads/R6590TN.pdf
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Sample DRG Results Letter
2010
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Pt specific results
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Now you have the Demand
RAC letter..
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Review results of the initial validation review.
 Involve physician if necessary to assist in developing an
appeal strategy.
 If no appeal is appropriate, flag the account for
recoupment and monitor.
 Prepare a letter to send to the pt; watch for Medigap
recoupment &/or refunds
 Determine rebilling potential for lesser services.
 Determine the value of using the informal 1-40 day
discussion period with the RAC.
 Determine to repay or request an Automatic Offset of
amt to be recouped from the MAC within 30 days with no
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interest.
Sample letter communication
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Dear pt
As part of ABC hospital’s commitment to compliance, we are
continuously auditing to ensure accuracy and adherence to the
Medicare regulations.
On (date), Medicare and ABC hospital had a dispute regarding your
(type of service). Medicare has determined to take back the
payment and therefore, we will be refunding your payment of $ (or
indicate if the supplemental insurance will be refunded.)
If you have any questions, please call our Medicare specialist,
Susan Jones, at 1 -800-happy hospital. We apologize for any
confusion this may have caused.
Thank you for allowing ABC hospital to serve your health care
needs.
RAC 2010
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Decision Process
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Once the results or demand letter has been received,
each provider/facility must make a decision – to appeal
or not to appeal.
 Approaches:
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Kitchen sink – appeal everything
Determine ‘appealibility’ of the denial
If appealing, decide to appeal within 30 days of the demand and
incur interest
If appealing, appeal within the normal 120 days, with funds
recouped at 41 days, with interest from day 30
If appealing, appeal within the normal 120 days, pay the
demanded amt within 30 days, no interest.
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Message from CMS/HDI/WPS
 Can
I rebill or must I file an appeal?
 Call with CMS/HDI/WPS J5, a MAC 7-8-10
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RAC has identified a MUE due to a charge capture error
and there was an accurate CPT that should have been
used, an appeal & corrected UB must be filed to get the
money for the corrected CPT.
If the facility did data mining and found that the same
issue had occurred on other claims, a corrected claim
should be submitted.
Discuss with the MAC prior to either to ensure it is done
correctly.
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Provider Options – RAC overpayment
determination
(Noridian Medicare Part A contractor, 3-10)
Which option
should I use?
Discussion
Period
Rebuttal
Redeterminatio
n
The discussion period
offers the opportunity
to provide additional
information to the
RAC to indicate why
recoupment should be
initiated. It also offers
the RAC opportunity
to explain the
rationale for the
overpayment decision.
A rebuttal should be
submitted only on rare
occasions of extreme
financial hardship. The
rebuttal process allows the
provider the opportunity to
provide a statement and
accompanying evidence
indicating why the
overpayment would cause
extreme financial hardship.
A rebuttal is not intended to
review supporting medical
documentation. A rebuttal
should not duplicate the
redetermination process.
A redetermination is
the first level of
appeal. A provider
may request a
redetermination when
they are dissatisfied
with the overpayment
decision. A
redetermination must
be submitted within 30
days to prevent offset
on the 41st day.
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More on Provider Options
Discussion
period
Rebuttal
Redetermination
Who do I Contract RAC
Contractor/MAC
Contractor/MAC
Timeframe
Day 1-40
Day 1-15
Day 1-120; must be
submitted within 120
days of demand
letter. To prevent
offset on day 41; file
within 30 days but
interest will accrue
(Transmittal 141)
Timeframe begins
Automated reviewupon demand letter:
Complex-upon
results letter
Date of demand
letter
Upon receipt of
demand letter
Timeframe ends
Day 40 (offset
begins on day 41)
Day 15
Day 120
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New Appeal Transmittal
 Transmittal
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1762, CR 6377 July 2, 2009
www.cms.hhs.gov/transmittals/downloads/R1762CP.pdf
Glossary of terms
All appeals are on behalf of the beneficiary. “A provider or supplier
may represent that beneficiary on the beneficiary’s behalf. No fee.
CMS can assign liability to the pt if they ‘should have known’ noncoverage. Uncommon…
“When an appellant requests a reconsideration with a QIC (level 2),
the contractor (MAC/FI) must prepare and forward the case file to
the QIC. “
Letter format for appeals
Elements of each level of appeal
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New Appeal Forms
 Revision
12-10 CMS has updated their
Redetermination and Reconsideration
Appeals forms. No change to ALJ form.
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http://www.cms.gov/OrgMedFFSAppeals/Downloads/CM
S20027a.pdf
http://www.cms.gov/OrgMedFFSAppeals/Downloads/CM
S20033a.pdf
Minor changes
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Understanding ‘interest’
NEW Transmittal 141, CR 6183, 9-12-08
“Limitation on Recoupment (935) “
 If
the facility decides to appeal a RAC
determination-understand the process:
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If an appeal is filed within 30 days, the MAC/FI will not take back the funds.
(Take back is immediate and will occur within 41 days of notice if no appeal.)
However, while the facility is going thru the numerous Medicare steps of appeal,
interest will accrue on the amount that is being disputed.
If the overpayment dispute is overturned at any level of the appeal process, the
interest will be removed.
If the overpayment dispute is not overturned, then the interest is left on the
account.
The overpayment take back will include the interest.
There is an incentive to only appeal the determinations where there is a good
reason to believe it will be overturned. “Punished’ for appealing all.
(www.cms.hhs.gov/transmittals/downloads/R141FM.pdf)
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Transmittal 141, CR 6183
Section 935/Medicare Modernization Act, 2003
“Limitation on Recoupment”
 Overpayments
that are subject to
limitations on recoupment – appeals will
suspend the recoupment.
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Post-pay denials of claim under Part A and Part B
MSP duplicate payment
Both have demand letters
Medicare will resume overpayment recoveries WITH INTEREST if
the Medicare overpayment decision is upheld in the appeals
process.
www.cms.hhs.gov/transmittals/downloads/R141FM.pdf. MN 6183
is also available at this website. 9-12-08
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Impact of Transmittal 141
Without filing an appeal
With a timely appeal
1) Recoupment in 41 days
1) Timely = 120 days/redetermination
Recoupment/offset will occur on the
41st day, but the appeal can still be
filed
2) Timely = 30 days/redetermination
from demand letter will stop the
recoupment from occurring on the 41st
day
3) Timely for level 2 = 180 days
4) Timely for level 2 to stop
recoupment = 60 days from level
1/redetermination letter
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What about that Interest?

Penalty-If an appeal
is filed to stop the
recoupment, interest
accrues every 30
days until
recoupment. If
overturned, no
penalty will be
assessed.
 Average rate 11.00%
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If voluntary refund, no
interest to provider if
overturned.
 Interest is paid to the
provider if
recoupment is
overturned. Each 30
day period. (CR 6183)
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RAC Appeal Process – Mirrors
regular Medicare appeal levels
with minor exceptions
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RAC FAQs
Q: Will the Recovery Audit Contractors
(RAC) appeal process mirror the regular
Medicare appeal process?
A: The Medicare appeals process will remain the same for
physicians under Part B and Part A non-inpatient
claims. The only difference under Part A is for the
inpatient hospital claims under the Prospective Payment
System (PPS). In the current appeals process, the first
level appeal will go to the Quality Improvement
Organization (QIO); however, the RAC appeals will go
to the Fiscal Intermediary that processed the claim.
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Timeline for Appeal Process
Type of appeal
Provider timeline Determination by Decision
within…
Timeline within.
Redetermination
120 days from initial
determination
FI, Carrier or MAC
60 days of receipt
Reconsideration
180 days from the
redetermination
QIC
60 days of receipt
Hearing by the ALJ
60 days from the
QIC’s
reconsideration;
Balance at least
$120
ALJ
90 days of receipt
Board of Medicare
Appeals Council
60 days from the
ALJ’s decision
Board of appeals
90 days of receipt
Judicial Review in
US district court
60 days from the
Council’s decision;
at least $1180
US Court
Normal legal/court
process
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When Can Recoupments Occur
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Options:
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If no formal (1st level)
appeal is filed within 30
days(or payment is
made) of the recoupment
notice, the recoupment
will occur on the 41st day.
1st level = 120 days to
file. But if not done in 30
days, eligible for
recoupment.
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If level 2/reconsideration
is upheld, recoupment will
occur prior to ALJ
decision.
If a date for appeal is
missed, recoupment
process begins.
Interest will either be
charged against or added
to the acct – depending..
See table
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Timeframe for Medicare Recoupment
Process after the first demand letter
Transmittal 141, CR 6183
Timeframe
Medicare Contractor
Provider
Day 1
Date of demand letter (date
demand letter mailed)
Provider receives notification by
first class mail of overpayment
determination
Day 1-40
Day 41 deadline for discussion
request. (w/RAC) No
recoupment occurs
Provider must submit a
statement within 15 days from
the date of the demand letter
Day 1-40
No recoupment occurs
Provider can appeal and
potentially limit recoupment from
occurring
Day 41
Recoupment begins
Provider can appeal and
potentially stop recoupment.
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Redetermination
Documentation Process
Send ALL medical records for Redetermination level of appeal
Entire medical record reviewed
Medicare Redetermination Notice (MRN)
Summary of the Facts:
- Specific claim information
Explanation of the Decision:
- Most important element of the MRN
- Provides the logic for CMS-FI decision.
What to Include in your Request for an Independent Appeal:
CMS-FI provides a list of documentation needed to make a decision
for next level of Appeal.
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RAC Appeal Guidelines
May use CMS-20027 (Redetermination
Request Form) or
Send letter on provider letterhead
Also include
~ RAC determination letter
~ Detail page specific to claim
~ Any additional supporting information
Send to FI
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3 Potential Outcomes with
Redeterminations

Full reversal of the overpayment decision.(If
the recoupment had already occurred, verify no other
outstanding debt, then repay.)

Partial reversal = the debt is reduced below
the initial stated amt. FI/MAC will recalculate the
correct amt. Letter will indicate same. Recoupment of
remaining debt may start no earlier than 61 days from
the date of the revised overpayment determination.

Full Affirmation of the Overpayment decision.
CMS will issue 2nd or 3rd demand letter which will state
begin recoupment on 61st day unless QIC notice of
reconsideration appeal filed.
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2007 History of
Redeterminations

186 M claims
furnished by
hospitals, SNF, HH
and other providers.
 14.5 M were denied
 FI/MAC did appx
240,000 Part A
redeterminations=
1.7% of these denials
resulted in an appeal.

Redeterminations
Dispositions:
 Part A: 45%
unfavorable, 5%
partial, 50% favorable
 Part B: 37%
unfavorable, 3%
partial, 60%
favorable.

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Not all were RAC/Unable to
discern.
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Who are the Original Medicare
Qualified Independent
Contractors/QIC/Level 2/Reconsideration?
 Part
A East: Maximus, Inc
 Part A West: Maximus, Inc (as of 12-08)
 Part B North: First Coast Services, Inc
 Part B South: Q2 Administrators, LLC
 DME: Rivertrust Solutions, Inc
Source: www.cms.hhs.gov/OrgMedFFSAppeals
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Next steps for Recoupment
Process
Timeframe
Medicare Contractor
Day 60 following revised Date reconsideration
notice of overpayment
request is stamped in
following redetermination Mailroom, or payment
received from the
revised overpayment
notice
Provider
Provider must pay
overpayment or must
have submitted request
for 2nd level of appeal to
stop the recoupment
Day 61-75
Recoupment could begin Provider appeals or pays
on the 61st day
Day 76
Recoupment begins or
resumes
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Provider can still appeal.
Recoupment stops on
date of receipt of appeal.
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How to file a Reconsideration
Level 2

Written appeal request
sent to QIC within 180
days of receipt of the
redetermination. (To stop
recoupment=60 days)
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If the form is not used,
a written request must
contain all the following:

Bene name
Bene’s HIC #
Specific service & items for which the
reconsideration is requested and
specific dates of service
Name and signature of party
Name of the contractor that made the
redetermination
Clearly state why you disagree with
reconsideration determination.

Follow instructions on

Medicare
Redetermination Notice

(MRN)
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 Use standard form CMS
20033.
 Form is mailed with the
MRN.
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3 Potential Outcomes with
Reconsiderations
Full reversal – same as redeterminations
 Partial reversal – this reduces the
overpayment. QIC issue a revised demand letter
or make appropriate payments if due of an
underpayment amt. Recoupment will begin on
the 30th day from the date of the notice of the
revised payment.
 Affirmation – recoupment may resume on the
30th calendar after the date of the notice of the
reconsideration.

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2007 Reconsideration History

QIC (Qualified
Independent
Contractors)
processed appox
400,000 appeals in
2007.
 DME is separate.
 Not all were
RAC/unable to
discern.

Reconsideration
Dispositions:
 Part A: 79%
unfavorable, 3%
partial, 18%
favorable.
 Part B: 64%
unfavorable, 5%
partial, 31%
favorable.
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And then there was
ALJ/Administrative Law Judge
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Medicare contractors can initiate (or resume)
recoupment immediately upon receipt of the QIC’s
decision or dismissal notice regardless of subsequent
appeal to the ALJ (3rd level of appeal) and all further
appeals.
If the ALJ level process reverses the Medicare
overpayment determination, Medicare will refund both
principal and interest collected + pay interest on any
recouped funds that may kept from ongoing Medicare
payments.
If other outstanding debts, interest is applied against
those first before payment to the provider is made.
Can add up same issue items and fill jointly.
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Contingency Fee Rules
 RAC
must payback the contingency fee if
the claim was overturned at…


Demonstration RAC
Permanent RAC
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first level of appeal
any level of appeal
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Can the False Claims Act
Apply?
 If
the RACs find ‘reckless disregard for the
law’, referrals can be made to the
appropriate agency –starting with the
MAC/FI.
 The MAC/FI can investigate further and
refer for further investigation.
 And the story continues.
 NO HEAD IN THE SAND!!
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RAC ATTACK Rollout
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Create tracking and trending tool.
Track all requests – look for patterns as to why
the request was sent.
Track all recoupments with reasons. Implement
physician & nursing documentation training;
CDM changes; Dept head ed on charge
capture/billable services; coding ed,
continued inhouse defense auditing.
Determine best practices for TNT..
Develop corrective action w/immediate
implementation. This is not optional!
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Tools for Success
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Look at a tracking tool
Continue to learn from other states as the roll
out to 2010 is completed.
Watch for ongoing education from CMS
Look for trends identified from auditing and data
mining.
Internally audit, train – audit, train some more
Explore creation of a RAC Specialist-the most
detailed person in the revenue cycle!
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CMS Project Officers Contacts
•
Region A (DCS)
–
–
–
–
•
Region B (CGI)
–
–
–
–
•
http://racb.cgi.com
[email protected]
1-877-316-7222
CMS RAC Contact: [email protected]
Region C (Connolly)
–
–
–
–
•
www.connollyhealthcare.com/RAC
[email protected]
1-866-360-2507
CMS RAC Contact: [email protected]
Region D (HDI)
–
http://racinfo.healthdatainsights.com
[email protected]
1-866-590-5598 Part A
1-866-376-2319 Part B
–
CMS RAC Contact: [email protected]
–
–
–
•
www.dcsrac.com
[email protected]
1-866-201-0580
CMS RAC Contact: [email protected]
CMS assigns a project officer to each RAC. Use if
abuse of the SOW or other issues are occurring.
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First Level of Appeal
WHAT:
WHO:
USING:
HOW:
TIME:
Redetermination
Carried out by the FI
Form CMS 20027
Send request to MAC/FI
120 days from initial decision
~ No minimum amount in controversy
RESULTS: Review must be completed in 60 days
MAIL TO:
Attention: Part A Appeals
Check with your FI for correct address
RAC 2011 THANKS, Stacey
Levitt, NY
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Second Level of Appeal
WHAT:
WHO:
Reconsideration
Carried out by the QIC/qualified indpt
contractor
USING:
Form CMS 20033
HOW:
Request sent to QIC
TIME:
180 days from the date of
Redetermination decision
~ No minimum amount in controversy
RESULTS:
Review must be completed in 60 days
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Third Level of Appeal
WHO:
Administrative Law Judge (ALJ)
HOW:
File with the entity specified in QIC’s
reconsideration notice
(HHS OMHA field office)
TIME:
60 days from the date of QIC’s
reconsideration notice
~ Amount in controversy must be at least $120 as of
January 1, 2006
RESULTS: Review must be completed in 90 days
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Fourth Level of Appeal
WHO:
Medicare Appeals Council
(Also referred to as Departmental
Appeals Board)
HOW:
Carried out by an independent
agency within DHHS
TIME:
60 days from ALJ decision
~ Amount in controversy – carried in from ALJ
RESULTS: 90 days to complete review
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Fourth Level of Appeal
Medicare Appeals Council Address:
Departmental Appeals Board, MS 6127
330 Independence Avenue, SW
Cohen Building, Room G‐644
Washington, DC 20201
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Fifth Level of Appeal
WHAT:
WHO:
TIME:
Federal Court Review
Carried out by The Federal District
Court
60 days from the Medicare Appeals
Council decision
INCLUDE: ~ Amount in controversy - $1180
(effective 01/01/06)
~ Date of request
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Fifth Level of Appeal
Federal Court Review Address:
Department of Health and Human Services
General Counsel
200 Independence Avenue, SW
Washington, DC 20201
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References: Appeals information
Appeals: Administration Law Judge;
Departmental Appeals Board; U.S. District
Court Review
Changes to chapter 29 – Appeals of claims
decisions –revised
Appeals of RAC decisions
– MNU 2006‐02
Appeals of ALJ, Departmental Appeals Board,
and U.S. District Court Review
– CR 4152
Slide Material Culled from: 1) 06/2007 Medicare Appeals Process Provider Outreach & Education
2) CMS 03/07/2006_Appeals_Session_Materials
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CMS Project Officers Contacts
•
Region A (DCS)
–
–
–
–
•
Region B (CGI)
–
–
–
–
•
–
–
–
www.connollyhealthcare.com/RAC
[email protected]
1-866-360-2507
CMS RAC Contact: [email protected]
Region D (HDI)
–
http://racinfo.healthdatainsights.com
[email protected]
1-866-590-5598 Part A
1-866-376-2319 Part B
–
CMS RAC Contact: Brian. [email protected]
–
–
–
•
http://racb.cgi.com
[email protected]
1-877-316-7222
CMS RAC Contact: [email protected]
Region C (Connolly)
–
•
www.dcsrac.com
[email protected]
1-866-201-0580
CMS RAC Contact: [email protected]
CMS assigns a project officer to each RAC. Use if
abuse of the SOW or other issues are occurring.
AR Systems’ Contact Info
Day Egusquiza, President
AR Systems, Inc
Box 2521
Twin Falls, Id 83303
208 423 9036
[email protected]
Thanks for joining us!
See all our training opportunities + Boot Camps at
www.healthcare-seminar.com
RAC 2011
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